The developed countries are characterized by:-
- High Incomes
- High Level of Consumption
- Business Competition
- Liberal Foreign Trade
The Markets however in these countries are nearing saturation or have already saturated
While the advanced economies are characterized by high level of competition in the industrial sector and fast technological changes and innovation, most developing countries lag behind in these aspects. The difference in income levels may force comprise in the nature of demand has important implication for marketing.
Changes in the world economy:- These changes have largely affected the way in which businesses are carried on. These changes may be explained as follows:-
- Capital Movement rather than trade have become have driving forces of world economy. Based upon the attractiveness of a country in terms of the govt. economic policies investment friendly environment nation like – China, India & Brazil have become major economic forces to recon with.
The huge foreign investment in China has made it a strong economic nation and in no time it will emerge as a major production base for the world.
- Production has become uncoupled from employment:- Nation like India although are seeing and 8% growth but unfortunately this economic growth rate is same employment meaning that this growth is not creating employment, thus the long run prospect of such a growth is negative.
- Primary Factors of Production, that is land, labour, capital and machinery are no longer the driving force for an economy rather innovation, technical advancement have taken prominence ion spearheading the economic growth.
- Separation of Politics from Economics:- The economy is in control of Market forces as other factors as govt., politics are taking a back seat because of more economies opening up. Globalization, Liberalization & Privatization is what is driving economies rather than policies & govts.
- New World Economic order: where capitalism has won our socialism, collapse of communism and size of capitalism is likely to persuade more & more countries to open up and allow free play of market forces.